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I want to agree with Peter's remark, with one caveat. Clearly, whatever
orthodoxy is today, it is not your father's orthodoxy. The problem for the
survival of OIE is not that institutions and related subjects are being
ignored by orthodoxy but rather the reverse. Previously forbidden terrain
is now the turf of dissertations, stuff published across the spectrum of
orthodox journals, and Nobel awardees. In addition to economic history and
Stiglitz et al. on information issues, the deification of Coase stands out,
as does the Public Choice and Social Choice work of Buchanan, Olson, et al.
The empirical work on comparative growth wouldn't exist without the
incorporation of scores of political and social indicators. The explosion
of interest in the problems of transition, the shift from one institutional
regime to another in the old Eastern Bloc, may be the most compelling
historical influence on the revaluation of different ways of thinking in
economics.
Even game theory, whatever its limitations, has been tortured into some
degree of relevance in looking at human interactions. I have reservations
about experimental economics, but here too there has been much more
deflation than inflation of whatever is left of the rational economic
person. Finally, since one could go on, in my field of development
economics or, better, economic development, nobody talks anymore about
savings, capital, and so on, and it is pretty much wall to wall
institutions and institutional reform, and I don't mean just pro-market
reform at all. I might use the umbrella term governance to cover a range of
institutional issues.
My caveat is the old distinction between agency and structure. Orthodoxists
still try to ground most of their work on individual decisions and choices
while institutionalists put the person in the context of culture and
institutions, but in a manner much less deterministic than a few decades
ago. And, no, Alice, I don't know of any accessible middle ground
reconciling the two.
When is the last time anyone who would call itself an institutionalist was
heard to say anything of commanding interest?
I opined over ten years ago that "we had won" and it was time to declare
victory and move on, to what I was more coy about. I've never been one to
accept the whining loser line.
John "OIE" Adams
University of Virginia
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